On December 4, Whole Foods was added to the long list of employers that have been hit with nationwide class action lawsuits under the FCRA based on their background check practices. This lawsuit should serve as another reminder to employers to verify that their background check practices comply with the Fair Credit Reporting Act.
Prior to obtaining a consumer background report, the FCRA generally requires employers to provide applicants with a clear and conspicuous disclosure, "consisting solely of the disclosure" that a consumer report may be obtained for employment purposes. According to the allegations in the complaint, Whole Foods' background check disclosure violates this "consisting solely of the disclosure" requirement because the disclosure allegedly includes a release of liability. A violation of the FCRA carries with it the possibility of actual, statutory, and punitive damages.
The allegations against Whole Foods are not novel. In fact, there have been a number of federal decisions in recent years on the issue of whether the inclusion of a release in a background check disclosure form violates the FCRA. Although various courts have decided the issue differently, employers should be aware that background check disclosures that include releases have become a frequent target of FCRA class action lawsuits in recent years.
While employers may be tempted to include additional information in a background check disclosure, such as a liability release or information unrelated to the background check, the more complex the disclosure, the greater the chance it becomes the subject of a lawsuit under the FCRA.
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